GMO has posted a new 7-Year Asset Class Forecast.
At GMO we have spent the last four decades taking a long-horizon approach to equity investing. Over time, a unique and reliable group of standout companies emerged from our research.
Deep value stocks are GMO Asset Allocation’s highest conviction investment idea. In a world where many stocks are being driven ever higher by positive sentiment and investor optimism, some fundamentally sound but unloved companies are being left behind, consequently trading at extraordinary discounts.
In the last year, we’ve written about the poor performance of clean energy, while highlighting the strong long-term outlook for the sector and the attractive valuations. These are typically the sorts of things we focus on…valuations and the long-term fundamental prospects for companies. We tend to shy away from overanalyzing short-term market dynamics.
In theory, growing a pool of wealth over decades – whether for a family, an endowment, or a pensioner – is a straightforward endeavor.
As GMO celebrates its 30th anniversary managing emerging debt this year, we offer our comprehensive guide to emerging debt markets. Given the tumultuous recent events – a global pandemic, defaults, repricing of interest rates, relentless strength in the U.S. dollar – we’ll focus on the Why as a starting point. Then we’ll dive into the proliferating How, covering strategies and vehicles.
After a decade of consistent outperformance, Japanese small caps began underperforming their large cap peers in 2018, a trend that has accelerated since 2023.
Deep value stocks are currently our highest conviction long-only investment idea. For the avoidance of any doubt, when we talk about “deep value,” we simply mean stocks that are cheap, often screamingly so, relative to our appraisal of their fair value. We do not care about a “growth” or “value” label that has been assigned, sometimes seemingly arbitrarily, by one index provider or another.
Like you, we have read countless comparisons between today’s enthusiasm for all things AI and the top of the TMT bubble in 2000, with the implication being that stocks are on thin ice.
Local currency rates and FX screen attractive, while credit is neutral. In our Quarterly Valuation Update, we provide our Q2 assessment.
Explaining Strong Returns in the Face of Value Headwinds.
In this piece, we attempt to answer a number of questions we have gotten from clients about the impacts that rising levels of passive investing may have had on the stock market.
GMO has published a new 7-Year Asset Class Forecast.
GMO’s Small Cap Quality portfolio managers, Hassan Chowdhry and James Mendelson, discussed why small cap valuations are attractive today and why they believe using quality is a better way of investing in the asset class.
In September, we wrote a piece discussing some of the growing pains that have impacted clean energy in the last few years. Despite what we believe are compelling long-term growth prospects, the sector has continued to struggle over the past two quarters.
Local currency rates and FX continue to screen attractive, as credit spreads transition to neutral. As we look ahead to our Emerging Country Debt Strategy’s 30-year anniversary on April 19th, our team paused to reflect on how important our valuation metrics have been in discussions with our clients.
Despite strong gains in equity markets last year and year-to-date as well as indexes sitting at all-time highs, we are extremely excited about the investing landscape from an asset allocation perspective.
In a new piece, GMO’s long-term investment strategist Jeremy Grantham reexamines the ‘great paradox’ of the U.S. market.
In this paper, GMO proposes a novel approach to financing emerging countries’ transitions toward cleaner energy production. Indeed, we believe a significant opportunity exists across two dimensions: greenhouse gas (GHG) emissions reduction and investment returns.
In this paper, GMO proposes a novel approach to financing emerging countries’ transitions toward cleaner energy production.
Ratings are an important organizing principle in credit markets, often relied upon as a summary metric of default risk. While they offer a broad categorization, investors in credit markets must rely on much deeper analysis to measure and price the actual default risks involved.
Your active managers are more competent than they look.
Quality companies have long-term, durable business models and capital discipline, with proven track records. A strategy built around Quality that also considers valuation can mitigate risk and enhance returns.
Join the experts at GMO for a look at their robust Quality strategy that leverages four decades of Quality investing experience, blending quantitative discipline and fundamental analysis.
In this piece we compare two ways to take advantage of the USD’s richness versus emerging market currencies: EM equities and EM local currency debt. We believe that for relative value, diversification, and potential alpha reasons, EM local currency debt deserves a prominent place in portfolios today.
Enthusiasm for Japanese equities picked up in 2023 as evidenced by the 28% rally in the TOPIX (local) index through November.
GMO has published a new 7-Year Asset Class Forecast
As GMO launches its first ETF, it seemed like a good time to share my thoughts on the market inefficiency that the strategy seeks to exploit – the quality anomaly.
Investing in high-quality businesses that generate high and durable profits has added value through various market environments. Quality firms have capital discipline and are thinking long term, providing steady and robust returns. Today, with uncertainty high, Quality investments can mitigate risk and protect capital.
Join the experts at GMO and VettaFi for a webcast that digs into the benefits of Quality and outlines a strategy that seeks to invest in companies with a track record of success at attractive valuations.
While equity styles go in and out of favor, quality companies continue to serve clients as a core holding, resilient to economic headwinds and market drawdowns. For long-term investors searching for a durable equity solution, we believe quality is “the real McCoy"
Our emerging market debt valuation metrics across all but the U.S. interest rate dimension remain unambiguously attractive. In our Quarterly Valuation Update, we provide our Q3 assessment.
Japanese profits have benefited from the prolonged deleveraging of Japan Inc. The reduction in debt coupled with exceptionally low interest rates has allowed cash flow to impact the bottom line.
Investors have been underweight Japan for decades, but conditions on the ground have changed meaningfully. Amid improving fundamentals and governance reforms, we believe it’s time to close the gap and take advantage of the attractive opportunity among small-to-mid cap Japanese companies.
For various reasons, both have since struggled to recoup the necessary confidence to once again borrow in international commercial debt markets.
In our latest Quarterly Letter, Ben Inker and John Pease discuss the new economic regime, how investors can prepare for a recession, and the merits of combining high quality and cheap assets in today’s environment.
Despite substantial growth and huge advancements in public policy support, clean energy has had an abysmal stretch in the stock market the last two and a half years.
We have observed increasing volatility within our Systematic Global Macro (SGM) portfolio, partly driven by an increase in volatility in our equity positions.
Russia’s 2022 invasion of Ukraine and the ensuing war have prompted new and difficult questions for sovereign debt investors.
GMO 7-Year Asset Class Forecast: July 2023
Our emerging market debt valuation metrics across all but the U.S. interest rate dimension remain unambiguously attractive. In our Quarterly Valuation Update, we provide our Q2 assessment.
